What Would Google Do?

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3 What Would Google Do? Jeff Jarvis

4 For Tammy, Jake, and Julia

5 Contents WWGD? 1 Google Rules 9 New Relationship 11 Give the people control and we will use it Dell hell Your worst customer is your best friend Your best customer is your partner New Architecture 24 The link changes everything Do what you do best and link to the rest Join a network Be a platform Think distributed New Publicness 40 If you re not searchable, you won t be found Everybody needs Googlejuice Life is public, so is business Your customers are your ad agency New Society 48 E le g a nt or g a n i z a t ion New Economy 54 Small is the new big The post-scarcity economy Join the open- source, gift economy The mass market is dead long live the mass of niches

6 iv Contents Google commodifies everything Welcome to the Google economy New Business Reality 70 Atoms are a drag Middlemen are doomed Free is a business model Decide what business you re in New Attitude 82 There is an inverse relationship between control and trust Trust the people Listen New Ethic 91 Make mistakes well Life is a beta Be honest Be transparent Collaborate Don t be evil New Speed 103 Answers are instantaneous Life is live Mobs form in a flash New Imperatives 109 Beware the cash cow in the coal mine Encourage, enable, and protect innovation Simplify, simplify Get out of the way If Google Ruled the World 119 Media 123 The Google Times: Newspapers, post-paper Googlewood: Entertainment, opened up GoogleCollins: Killing the book to save it

7 Contents v Advertising 145 And now, a word from Google s sponsors Retail 153 Google Eats: A business built on openness Google Shops: A company built on people Utilities 162 Google Power & Light: What Google would do GT&T: What Google should do Manufacturing 172 The Googlemobile: From secrecy to sharing Google Cola: We re more than consumers Ser vice 182 Google Air: A social marketplace of customers Google Real Estate: Information is power Money 189 Google Capital: Money makes networks The First Bank of Google: Markets minus middlemen Public Welfare 199 St. Google s Hospital: The benefits of publicness Google Mutual Insurance: The business of cooperation Public Institutions 210 Google U: Opening education The United States of Google: Geeks rule Exceptions 222 PR and lawyers: Hopeless God and Apple: Beyond Google? Generation G 229 Continuing the conversation 243 Ac know ledg ments and disclosures 245 Index 247

8 About the Author Credits Cover Copyright About the Publisher

9 WWGD?

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11 It seems as if no company, executive, or institution truly understands how to survive and prosper in the internet age. Except Google. So, faced with most any challenge today, it makes sense to ask: WWGD? What would Google do? In management, commerce, news, media, manufacturing, marketing, service industries, investing, politics, government, and even education and religion, answering that question is a key to navigating a world that has changed radically and forever. That world is upside-down, inside-out, counterintuitive, and confusing. Who could have imagined that a free classified service could have had a profound and permanent effect on the entire newspaper industry, that kids with cameras and internet connections could gather larger audiences than cable networks could, that loners with keyboards could bring down politicians and companies, and that dropouts could build companies worth billions? They didn t do it by breaking rules. They operate by new rules of a new age, among them: Customers are now in charge. They can be heard around the globe and have an impact on huge institutions in an instant. People can find each other anywhere and coalesce around you or against you. The mass market is dead, replaced by the mass of niches. Markets are conversations, decreed The Cluetrain Manifesto, the seminal work of the internet age, in That means the key skill in any organization today is no longer marketing but conversing. We have shifted from an economy based on scarcity to one based on abundance. The control of products or distribution will no longer guarantee a premium and a profit. Enabling customers to collaborate with you in creating, distributing,

12 4 What Would Google Do? marketing, and supporting products is what creates a premium in today s market. The most successful enterprises today are networks which extract as little value as possible so they can grow as big as possible and the platforms on which those networks are built. Owning pipelines, people, products, or even intellectual property is no longer the key to success. Openness is. Google s found ers and executives understand the change brought by the internet. That is why they are so successful and powerful, running what The Times of London dubbed the fastest growing company in the history of the world. The same is true of a few disruptive capitalists and quasi-capitalists such as Mark Zuckerberg, found er of Facebook; Craig Newmark, who calls himself found er and customer service representative no joke at craigslist; Jimmy Wales, cofound er of Wikipedia; Jeff Bezos, found er of Amazon; and Kevin Rose, creator of Digg. They see a different world than the rest of us and make different decisions as a result, decisions that make no sense under old rules of old industries that are now blown apart thanks to these new ways and new thinkers. That is why the smart response to all this change is to ask what these disrupters what Mark, Craig, Jimmy, Jeff, Kevin, and, of course, Google would do. Google generously shares its own philosophy on its web site, setting out the 10 things Google has found to be true. They are smart but obvious PowerPoint lines helpful in employee indoctrination (especially necessary when your headcount explodes by 50 percent in a year to 16,000 at the end of 2007 and to 20,000 before the end of the following year): Focus on the user and all else will follow, Google decrees. It s best to do one thing really, really well.... Fast is better than slow.... You can make money without doing evil.... There s always more information out there.... The need for information crosses all borders.... These are useful, but they don t tell the entire story. There s more to learn from watching Google. The question I ask in the title is about thinking in new ways, facing new challenges, solving problems with new solutions, seeing new opportunities, and understanding a different way to look at the structure of the economy and society. I try to see the world as Google sees it, analyzing

13 Jeff Jarvis 5 and deconstructing its success from a distance so we can apply what we learn to our own companies, institutions, and careers. Together, we will reverse-engineer Google. You can bring this same discipline to other competitors, companies, and leaders whose success you find puzzling but admirable. In fact, you must. Google is our model for thinking in new ways because it is so singularly successful. Hitwise, which measures internet traffic, reported that Google had 71 percent share of searches in the United States and 87 percent in the United Kingdom in With its acquisition of ad- serving company DoubleClick in 2008, Google controlled 69 percent of online ad serving, according to Attributor, and 24 percent of online ad revenue, according to IDC. In the U.K., Google s ad revenue grew past the largest single commercial TV entity, ITV, in 2008, and it is next expected to surpass the revenue of all British national newspapers combined. It is still exploding: Google s traffic in 2007 was up 22.4 percent in a year. Google no longer says how many servers its runs estimates run into the millions and it has stopped saying how many pages it monitors, but when it started in 1998, it indexed 26 million pages; by 2000, it tracked one billion; and in mid-2008 it said it followed one trillion web addresses. In 2007 and again in 2008, says the Millward Brown BrandZ Top 100, Google was the number one brand in the world. By contrast, Yahoo and AOL, each a former king of the online hill, are already has-beens. They operate under the old rules. They control content and distribution and think they can own customers, relationships, and attention. They create destinations and have the hubris to think customers should come to them. They spend a huge proportion of their revenue on marketing to get those people there and work hard to keep them there. Yahoo! is the last old-media company. Google is the first post-media company. Unlike Yahoo, Google is not a portal. It is a network and a platform. Google thinks in distributed ways. It goes to the people. There are bits of Google spread all over the web. About a third of Google s revenue expected to total $20 billion in 2008 is earned not at Google.com but at sites all over the internet. Here s how they do it: The Google AdSense box on the home page of my blog, Buzzmachine.com, makes me part of Google s empire. Google sends me money for those ads. Google sends me readers via search. Google benefits by showing those readers more of its ads, which it can make more relevant,

14 6 What Would Google Do? effective, and profitable because it knows what my site is about. I invited Google in because Google helps me do what I want to do. I, in turn, help spread Google by putting its ads on my page and by embedding its YouTube videos, Google Maps, and Google search box on my blog. When I link to a page on the internet, I help Google understand what that page is about and how popular it is. I make Google smarter. With our clicks and links, we all do. Google is clever enough to organize that knowledge and take advantage of it. It exploits the wisdom of the crowd, and thereby respects us in the crowd. Google trusts us (well, most of us, except those damned spammers but then Google has ways to ferret out the evil few among us). Google realizes that we are individuals who live in an almost infinite universe of small communities of interest, information, and geography. Google does not treat us as a mass. Google understands that the economy is made up of a mass of niches that small is the new big. Google does not see itself as a product. It is a service, a platform, a means of enabling others that so far knows no limits. As hard as it is to imagine today, Google could fail. It could grow too gangly to operate efficiently (I ve heard rumblings from insiders that it s getting harder to accomplish things quickly because the company is just so huge). It could grow so dominant that government regulators try to break it up. In 2008, the U.S. Justice Department hired a top litigator to investigate Google s deal to serve ads on Yahoo and its dominance of the advertising market (though it should be noted that Google gained that position with the eager acquiescence of Yahoo, newspapers, and ad agencies). Google could also grow so big that it becomes hard to grow bigger; that s already becoming the case. Google could lose our trust the moment it misuses the data it has about us or decides to use our growing dependence on it as a chokehold to charge us (as cable companies, phone companies, and airlines do). It could lose its way or just screw up. When Gmail had a rare moment of dysfunction, Google CEO Eric Schmidt reminded the world, We re not perfect. So don t get hung up on trying to be Google, on mimicking what Google does. This book is about more than Google and its own rules and about more than technology and business. It s about seeing the world as Google sees it, finding your own new worldview, and seeing differently. In that sense, this isn t a book about Google. It s a book about you. It is about your world, how it is changing for you, and what you can gain from that.

15 Jeff Jarvis 7 It is hard to name an industry or institution advertisers, airlines, retailers, auto makers, auto dealers, consumer-products brands, computer companies, fashion designers, telephone companies, cable operators, political candidates, government leaders, university educators that should not be asking: What would Google do? I will help you answer that question for your own world in the next section of this book, interpreting the wisdom of Google s ways as a set of rules to live and do business by in any sector of society. Then, in the following section, I ll illustrate how these laws can be applied across many companies, industries, and institutions, analyzing each as an exercise in thinking and acting differently. Finally, I examine how Googlethink is affecting our lives and the future of Generation Google. We begin by examining the new power structure in our economy and society, where we, the people, are suddenly in charge empowered by Google.

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17 Google Rules

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19 New Relationship Give the people control and we will use it Dell hell Your worst customer is your best friend Your best customer is your partner Give the people control and we will use it Before getting to Google s laws, allow me to start with my own first law, learned on the internet: Give the people control and we will use it. Don t, and you will lose us. That is the essential rule of the new age. Previously, the powerful companies, institutions, and governments believed they were in control, and they were. But no more. Now the internet allows us to speak to the world, to organize ourselves, to find and spread information, to challenge old ways, to retake control. Of course, we want to be in control. When don t you want to be the master of your work, business, home, time, and money? It s your life. Why would you cede control to someone else if you didn t have to? And once lost, wouldn t you take it back if given a chance? This empowerment is the reason we get so much angrier today when we are forced to wait on hold for computer service or at home for the cable guy or on the tarmac to get to our destination. It is why we lash out at companies now that we can on the web. But it is also why, when we are treated with respect and given control, we customers can be surprisingly generous and helpful. Many good books have hailed the rise of the new, empowered customer. In this book, we ask: What should you do about it? How should this power-shift change the ways companies, institutions, and managers work? How do you survive? How do you benefit? The answer the first

20 12 What Would Google Do? and most important lesson in this book is this: Companies must learn that they are better off when they cede control to their customers. Give us control, we will use it, and you will win. Dell hell Here is a case study in Jarvis First Law involving Dell and me. But it isn t about me, the angry customer. It is about how Dell transformed itself from worst to first in the era of customer control. Dell had been the poster child for what you should not do. Then it became a model for what you should do. After I quit my job as a media executive and left my expense account behind, I had to buy a new laptop. I bought a Dell, because it was inexpensive and because Dell had a reputation for good customer service. To be safe, I paid extra for at-home service. From the moment I first turned on the computer, it had problems. I ll spare you the excruciating details of my shaggy laptop story. Suffice it to say that the computer had a number of bugs and I tried to fix them a number of times, spending countless hours on hold with people in faraway lands. Though I had paid for in-home service, I had to send the machine in to get it fixed, only to find something new wrong every time I got it back. Each time I dared to contact Dell, I had to start from square one: Sisyphus on hold. I never made progress. It drove me mad. Finally, in hopeless frustration, I went to my blog in June 2005 and wrote a post under the headline, Dell sucks. Now that s not quite as juvenile as it sounds, for if you search Google for any brand followed by the word sucks, you will find the Consumer Reports of the people. I wanted to add to the wisdom of the crowd which Google now made possible. I wanted to warn off the next potential customer who was smart enough to search for Dell sucks before hitting the buy button (which I should have done in the first place; the knowledge was there, at Google all I had to do was ask). There were already a few million results for Dell sucks. Mine was just one more. I didn t think I could fix my problem this way. I didn t think anything would come of it. But I got to vent steam. And that made me feel better. If I had known that my post would spark a pop u- lar movement and PR avalanche, I might have been more temperate in my language. But, hey, I was angry. This is what I blogged:

21 Jeff Jarvis 13 I just got a new Dell laptop and paid a fortune for the four-year, in-home service. The machine is a lemon and the service is a lie. I m having all kinds of trouble with the hardware: overheats, network doesn t work, maxes out on CPU usage. It s a lemon. But what really irks me is that they say if they sent someone to my home which I paid for he wouldn t have the parts, so I might as well just send the machine in and lose it for 7 10 days plus the time going through this crap. So I have this new machine and paid for them to FUCKING FIX IT IN MY HOUSE and they don t and I lose it for two weeks. DELL SUCKS. DELL LIES. Put that in your Google and smoke it, Dell. Then something amazing happened. At first a few, then a score, then dozens and hundreds and eventually thousands of people rallied around and shouted, What he says! They left comments on my blog. They wrote blog posts elsewhere and linked to mine, spreading my story to thousands, perhaps millions more, and expanding Dell s anti fan club. They ed me, telling me their sad sagas in excruciating detail and some continue to me to this day. The tale took on a life of its own as links led to more links and to a broader discussion about blogs, customers, and companies. We bloggers decided this was a test: Was Dell reading blogs? Was it listening? Houston Chronicle tech columnist Dwight Silverman did what reporters do: He called Dell to ask for its policy on blogs. Look, don t touch, was the official reply. If customers want to talk to Dell, the spokeswoman said, they should talk to the company on its site, on its terms. But Dell s customers were already talking about Dell away from its site and control, on their own terms. Soon, my blog posts were appearing progressively higher in Google search results for Dell, reaching the precious first page, only a few slots behind the link to Dell s home page. The conversation about my blog post was beginning to damage Dell s brand. About this time, Dell s vital signs began falling. Customer- satisfaction ratings fell. Revenue results disappointed analysts. The share price dove, eventually losing half its value from about the time this saga began. That

22 14 What Would Google Do? wasn t entirely my fault. I swear it wasn t. Though some have given me credit or blame for cutting Dell down to size, it s not true. I hardly did a thing. All I did was write a blog post that became a gathering point for many of my fellow frustrated Dell customers. They now stood beside me brandishing pitchforks and torches, brought together by the coalescing power of the internet, blogs, and Google. They were the people not me who should have been heeded by the company and by the analysts and reporters covering it. They told the real story of what was happening to Dell. Two months after my Dell hell began, in August 2005, BusinessWeek told the tale in print. Under the headline, Dell: In the bloghouse, the magazine wrote: PC industry circles have been buzzing in recent months that Dell s customer support is slipping a claim bolstered on Aug. 16 by a University of Michigan study that showed a hefty decline in customer satisfaction from a year ago. So the last thing Dell needed was for someone to turn the customer-service issue into a cause célèbre. Enter Jeff Jarvis. About this time, I managed to get a refund for my laptop, though not as the result of blogging. I had sent an to the company s head of marketing and, for snarky good measure, its chief ethics officer. The nice and patient lady whose job it is to talk to the irritants who get through to vice presidents called to offer help. She reached me on my mobile phone, I swear, just as I was in a computer store shopping for my Mac. She off ered to exchange my computer for a new Dell laptop. I told her that I had lost trust in the company s products and services and just wanted my money back. She gave it to me. And so, that August, I shipped the machine back and believed my Dell odyssey had ended. In what I thought was the final act in my silicon opera, I blogged an open letter to Michael Dell offering sincere and, I believed, helpful advice about bloggers and customers, who are more often now one and the same. Your customer satisfaction is plummeting, your market share is shrinking, and your stock price is deflating.

23 Jeff Jarvis 15 Let me give you some indication of why, from one consumer s perspective... The bottom line is that a low-price coupon may have gotten me to buy a Dell, but your product was a lemon and your customer service was appalling.... I m typing this on an Apple PowerBook. I also have bought two more Apples for our home. But you didn t just lose three PC sales and me as a customer. Today, when you lose a customer, you don t lose just that customer, you risk losing that customer s friends. And thanks to the internet and blogs and consumer rate- and-review services, your customers have lots and lots of friends all around the world. I told him about my fellow customers who d chimed in with their complaints. I suggested he should have interns better yet, vice presidents reading what the world was saying about the company in the blogosphere. I also mentioned the big-time press, including BusinessWeek, that had picked up the story. Mocking Dell s own commercials, Fast Company magazine turned customer complaint online into a verb: You got Dell d. But the tale I really loved, which I recounted in my open letter, came from Rick Segal, a blogging venture capitalist in Toronto who sat next to a couple of bank tellers in his office building s food court and heard them discussing the saga. That is how easily things spread online. Segal blogged the scene: Lady one: I was going to buy a new Dell but did you hear about Jeff Jarvis and the absolute hell he is going through with them? Lady two: Yeah, I know, the IT guy told me that.... Segal had his own advice for Dell. The pay-attention part: Lots of people (Dell?) are making the assumption that average people or the masses don t really see/read blogs so we take a little heat and move on. Big mistake. My advice for Dell continued with four simple tips: 1. Read blogs. Go to Technorati, Icerocket, Google, Bloglines, Pubsub, [search engines for blogs] and search for Dell and read what they re saying about you. Get it out of your head that these are bloggers, just strange beasts blathering. These are

24 16 What Would Google Do? consumers, your marketplace, your customers if you re lucky. They are just people. You surely spend a fortune on consumer research, on surveys and focus groups and think tanks to find out what people are thinking. On blogs, they will tell you for free. All you have to do is read them. All you have to do is listen. 2. Talk with your consumers. One of your executives said you have a look-don t-touch policy regarding blogs. How insulting that is: You ignore your consumers? You act as if we re not here? How would you like it if you gave someone thousands of dollars and they ignored you? You re not used to being treated that way. Neither are we. It s just rude. These bloggers care enough to talk about your products and service and brands. The least you can do is engage them and join the conversation. You will learn more than any think tank can ever tell you about what the market thinks of your products. But go to the next step: Ask your consumers what they think you should do. You ll end up with better products and you ll do a better job selling them to more satisfied customers who can even help each other, if you ll let them. It s good business, gentlemen. 3. Blog. If Microsoft and Sun and even GM, fercapitalismsake, can have their smartest [executives] blogging, so why shouldn t you? Or the better question: Why should you? Because it s a fad? No. Because it will make you cool with your kids? No. Blog because it shows that you are open and unafraid no, eager to engage your consumers, eye-to-eye. 4. Listen to all your bad press and bad blog PR and consumer dissatisfaction and falling stock price and to the failure of your low-price strategy and use that blog to admit that you have a problem. Then show us how you are going to improve quality and let us help. Make better computers and hire customer service people who serve customers. If you join the conversation your customers are having without you, I concluded, it may not be too late. At last count, there were more than

25 Jeff Jarvis responses to that blog post alone from fellow customers. One said: I didn t know Dell had dropped the ball as far as quality was concerned. A few years ago, I would still be in the dark. The new grapevine is a great thing for consumers. That was that, or so I thought. But eight months later, in April 2006, Dell began doing what I suggested and what others said would have been expensive and impractical: The company dispatched technical support staff to reach out to bloggers who had complaints, offering to solve problems, one at a time. Guess what happened: When technicians fixed bloggers issues, Dell was rewarded with pleasantly surprised blog buzz. Bad PR turned good. Dell discovered that, contrary to what skeptics thought, this direct conversation with customers was an efficient way to learn about problems and solve them. That July, Dell started its own blog, Direct2Dell. It got off to a rocky start, doling out promotion of the company and its products and not addressing the many elephants in its room. But after a few weeks, chief company blogger Lionel Menchaca entered the discussion with disarming directness and openness, linking and responding to Dell s critics and promising: Real people are here and we re listening. He publicly discussed the case of an infamous flaming notebook a computer whose battery exploded and caught fire rather spectacularly, pictures of which had sped around the internet (leading to a recall that also hit other computer manufacturers). He brought in other executives to be answerable to customers for ecommerce, product design, and, yes, customer service. The company dispatched staff to read blogs and comment on them. Later it enabled customers to rate and review products positively and negatively on Dell s site. Dell was listening and it was speaking in a new and credible human voice. In February 2007, Michael Dell ordered the launch of IdeaStorm, a site where customers could tell Dell what to do, discussing and voting on the community s favorite ideas. There the company not only listened but acted. Customers wanted Dell to make computers for consumers with the open Linux operating system instead of Microsoft Windows. Dell s people fretted about problems that could arise if they installed one flavor of Linux versus another, but customers told them which way to go. Dell worried about supporting the new operating system, but customers said there was

26 18 What Would Google Do? a community in place to handle that. Today, Dell sells Linux computers. In a later interview, Michael Dell acknowledged that selling Linux machines might not be a huge business, but it was an important symbolic act, the mark of a new partnership between company and customer. I don t mean to take credit for Dell s transformation, only to note that Dell was now doing everything I had suggested in my open letter: reading and reaching out to bloggers, blogging itself, enabling customers to tell the company what to do, and doing it. So I had to give Dell credit: It was on the right road. Dell had joined the conversation. The following April, I met Dell blogger Menchaca, who d read on my blog that I was headed to Austin, in Dell s backyard, for a conference. He invited me out for beer with colleagues. On the way to the bar, Menchaca called his mother and told her that he was going to meet that blogger, Jeff Jarvis. Her response: Are you sure you re going to be all right, dear? My reputation had preceded me. But the Dell team came unarmed, as did I, and they convinced me that they had learned from the blogstorm around them and were using it to build a new relationship with their customers. In the fall of 2007, I went to Dell headquarters in Round Rock, Texas, to interview Michael Dell for BusinessWeek and hear the company s turnaround story. As we sat down to talk, Dell wasn t exactly warm that may just be the way he is (it s a CEO thing) or the problem could have been me (after all, I was the guy who d raised hell). He began: We screwed up, right? He followed that confession with CEO bromides: You gotta go back to the root cause and how to solve these things so they don t occur. But eventually, Dell started to sound like a blogger himself. He might as well have had my first law etched in brass on his desk. There are lots of lessons here for companies, he told me. The simple way to think about it is, these conversations are going to occur whether you like it or not. OK? Well, do you want to be part of that, or not? My argument is, you absolutely do. You can learn from that.... And you can be a better company by listening and being involved in that conversation. Of course, the company did more than blog to get itself out of trouble. Dell spent $150 million in 2007 beefing up its justifiably maligned customer-support call centers. Dick Hunter, former head of manufacturing, left retirement to head customer service and brought a factory-floor zeal for management and measure ment to the task. The company had been

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